New Citi Survey Shows That More Americans Say They Are Increasing –
and Fewer Decreasing – Holiday Spending in 2013

Americans Who Say They are Spending More Rises 5 Points to 11 Percent
From Two Years Ago While Those Spending Less Drops 12 Points to 35
Percent

Citi Economic Pulse Holds Steady with Highest Yet Rating of the
Economy Tempered with Decreased Comfort Level with Current Levels of
Savings and Debt

December 16, 2013 09:00 AM Eastern Standard Time

NEW YORK--(BUSINESS WIRE)--As Americans check holiday presents off their lists and get ready for
the holiday season, more say they will increase spending and fewer say
they are cutting back on expenses, according to the results of a recent
Citi national survey, conducted by Hart Research. Only 35 percent said
they would be spending less than last year, reflecting the lowest level
of holiday budget cutbacks since the financial crisis. Sixty-three
percent of Americans plan to spend more (11 percent) or the same (52
percent) on holiday shopping this year.

Consumers’ approximated holiday budgets have reached a high in
comparison to recent years. Twenty-nine percent of Americans estimate
they will be spending more than $1,000 this holiday season, up from 22
percent in 2011. Amongst those planning on shopping for the holidays,
Americans will spend an average of $968, up $60 from 2011.

“It’s reassuring to see spending on the rise, since the increase in
Americans’ holiday budgets may indicate a more optimistic outlook
towards making financial progress in 2014,” said Linda Descano, CFA®,
Head of Content and Social, North America Marketing at Citi, and
President and CEO of Women & Co., Citi’s personal finance resource for
women.

Economic Outlook Hits High Point but Anxiety about Debt and Savings
Grows Too

In June 2013, the Citibank Economic Pulse entered positive territory for
the first time since its inception in 2009. The sustained rise from -17
in the summer of 2011 to +1 in the summer of 2013 represented a strong
sign that the American economy was recovering and consumers were
regaining confidence. The Citibank Economic Pulse decreased from +1 to 0
this quarter, reflecting that discomfort with debt and savings levels
weighs on consumers’ minds and tempers their positivity.

When asked to reflect on their local economic conditions and personal
financial standing, more Americans have a positive outlook. Thirty-seven
percent of Americans rate the condition of the economy in their area to
be good or excellent, reflecting the highest levels of positivity since
the Citibank Economic Pulse began in 2009. Twenty-seven percent of
consumers feel that they are better off now than a year ago, up from 20
percent in August 2012. As the countdown to 2014 draws nearer, 69
percent of Americans are optimistic that their personal financial
situation will get better in the year ahead.

Nonetheless, for 37 percent of Americans, up from 30 percent in August
2012, discomfort with their current level of debt weighs on their
overall economic sentiment. Another 48 percent of Americans reported
discomfort with their current level of savings for college, retirement,
or a rainy day, further depressing an otherwise brighter economic
perspective.

Outlook among Lower Income Households Remains Negative

Lower income Americans’ sentiment declined this quarter, but remains far
more upbeat than in recent years. The Citi Economic Pulse is -18 among
those earning under $30,000, 2 points lower than in June 2013, but
substantially better than when it sunk to -29 at the depths of the
downturn in August 2011. For families earning $30,000 to $50,000, the
Pulse dropped to -5, down 8 points from June 2013, but substantially
higher than -24 in August 2011.

Debt and savings levels similarly weigh heavily on the minds of lower
income families. Only 33 percent of families earning under $30,000 say
they are somewhat or very comfortable with their level of savings (down
from 40 percent in June), while 43 percent of families earning $30,000
to $50,000 say they are comfortable (down from 55 percent in June).
Similarly, just 51 percent of families with incomes under $30,000 report
feeling comfortable with their current levels of debt (down from 55
percent in June), while comfort with debt among those earning $30,000 to
$50,000 has dropped to 57 percent (down from 67 percent in June).

Gift Wish List from a Wealthy Secret Santa

Even in their imaginations, Americans are focused on mitigating their
discomfort with their savings and debt levels and are practical about
their dreams. When asked what they may want from a very wealthy Secret
Santa, lavish gifts such as jewelry, a new wardrobe, plastic surgery, or
a new car, fell to the bottom of list while more practical choices rose
to the top. Americans said they would want a house or new place to live
(23 percent) or have their credit card bills paid off (19 percent). The
next most popular response, a vacation, came in at 15 percent.

Stretching Holiday Dollars

While consumers are eager to save, they are not taking full advantage of
all of the opportunities to stretch their budget this holiday season. To
manage holiday expenses, only one in five are comparing prices online
and only 16 percent shopped early to get better deals. Social media
listening, a key way to learn about good deals, is only currently being
used by 8 percent of Americans. Credit cards with a price-back guarantee
are only being used by 6 percent of consumers and only 5 percent are
using their credit card reward points to purchase gifts.

The principal coping strategy for the holidays is to have a budget and
to stick to it. Nearly half (45 percent) of consumers employ this
strategy while others say they have a general idea of what they will
spend but do not track every penny. Only 18 percent of Americans have
committed to spending whatever it takes to ensure their families have a
happy holiday.

“Americans may be leaving some simple holiday money-saving options on
the table,” added Descano. “By comparing prices online, using credit
card rewards to purchase gifts, and using social media to find the best
deals, many still have time to stretch their holiday budget this year.”

Moving Forward and Organizing Financial Lives

American consumers have become financially savvy, already taking many
steps to move their financial lives forward. To get their financial
lives under control, 74 percent of consumers say they are paying their
credit card bills on time and 68 percent are avoiding overdrawing their
checking accounts. In order to properly position themselves for the
future, the majority of Americans (71 percent) say they have been
organizing their finances and more than half (59 percent) say they have
adequate life insurance. More than half of Americans are protecting
themselves against identity theft (56 percent), using mobile banking to
keep track of their finances (54 percent), automating online bill-paying
(52 percent), maintaining an emergency fund (52 percent) and signing up
for paperless financial statements (51 percent).

With New Year’s Eve on the horizon, Americans are also resolving to
improve their personal finances in 2014. While only 33 percent say they
have already reached a savings goal, another 42 resolve to reach theirs
in the year ahead. Just 39 percent say they were able to save and invest
today, while another 41 percent resolve to save and invest more in 2014.
Thirty-six percent say they have an “up-to-date” will, with an
additional 32 percent resolving to ensure they have one in the coming
year.

Americans of all ages are preparing themselves financially for the
future, including Millennials. Millennials are the youngest demographic
in the workforce and many seem to know they need to do more to prepare
for their financial futures. They say they are resolved to do more in
most areas of financial improvement in 2014, with 42 percent resolving
to have a formal financial plan (compared to 29 percent of the general
population) and 50 percent resolving to get a higher paying job
(compared to 27 percent of the general population).

About The Citi Economic Pulse

The Citi Economic Pulse is calculated by subtracting negative responses
to each item from the positive responses for 8 Pulse items, divided by
8. The 8 Pulse items include: current condition of the economy in area;
business conditions in area over the next twelve months; current
employment opportunities in area; buying climate for big ticket items;
personal financial situation compared to a year ago; outlook on personal
financial situation for the next twelve months; comfort with current
level of savings; and comfort with current level of debt. The Pulse
scale can range from +100 (if every respondent gave positive response to
each of the 8 questions) to -100 (if all respondents expressed
consistently negative views).

Hart Research Associates conducted the telephone survey of 1,817 adults
from November 14 to November 20, 2013. The overall statistical margin of
sampling error is ±2.31 percentage points for the main sample and is
higher among subgroups.

About Citi

Citi, the leading global bank, has approximately 200 million customer
accounts and does business in more than 160 countries and jurisdictions.
Citi provides consumers, corporations, governments and institutions with
a broad range of financial products and services, including consumer
banking and credit, corporate and investment banking, securities
brokerage, transaction services, and wealth management.